This fall, Saint Augustine’s University in Raleigh is navigating through serious financial challenges that are raising eyebrows and worries about the school’s future. A recently uncovered $7 million loan agreement has some financial experts questioning whether the university’s attempt to make ends meet this semester might come at too high a cost.

Back in May, SAU entered a financial deal with Gothic Ventures, LLP to secure much-needed funds. This loan was intended to cover essential bills everything from paying the U.S. Department of Education and student refunds to catching up on past-due payroll, taxes, and insurance. However, the loan’s terms are steep: a 24% interest rate, a 2% management fee, and an extra $75,000 due just for documentation and due diligence. To top it off, the university’s main campus and nearby properties are listed as collateral.

Martin Eakes, CEO of Self-Help Credit Union, voiced his concern, saying SAU probably “felt desperate trying to open their school for the fall of 2024.” Eakes even reached out to Gothic Ventures’ Managing Partner W.H. Kip Johnson III, pushing for a lower interest rate of around 9% which he called “the honorable thing to do.” So far, however, Gothic Ventures hasn’t budged on the original rate.

While other schools in North Carolina are enjoying traditional homecoming festivities, SAU’s campus has been a bit quieter this fall. On top of financial struggles, the Central Intercollegiate Athletic Association (CIAA) just announced that SAU won’t participate in athletics for the rest of the 2024-25 season.

 This isn’t entirely unexpected, as SAU has already cut several sports in recent years, including football, softball, and volleyball. With these cuts, the school was barely meeting the NCAA’s Division II requirement of sponsoring at least 10 sports. Now, even the teams that do compete won’t be eligible for conference standings or championships.

This news hits particularly hard given the university’s ongoing accreditation troubles. Earlier this year, SAU’s appeal to retain its accreditation with the Southern Association of Colleges and Schools Commission was denied, largely due to financial instability. Losing accreditation could severely limit SAU’s funding and affect the university’s ability to support its students.

For now, the cross-country team is still in action, but it’s unclear how long that will last. The CIAA commissioner offered words of support for SAU, acknowledging its important place in the HBCU community and its history with the conference.

SAU’s path forward remains uncertain, but students, alumni, and supporters are holding onto hope. They’re calling on each other to rally around the university as it faces one of its biggest challenges yet.